Subscribe to our daily podcast here.
Here's our summary of key events over the weekend that affect New Zealand, with news the US corporate earnings season is in full swing. Last week 488 companies reported Q3 results on Wall Street and tomorrow another 368 will report on that day alone.
Wall Street ended last week up a marginal +0.7%. That Q3 earnings season isn't generating much enthusiasm so far. Shanghai ended lower by -1.9% while Hong Kong was up +0.7%. Tokyo was the Asia star, up +3.4%. The NZX50 rose +1.3% and the ASX200 rose +0.6%. European markets all ended they week on a downer.
In Japan, they have negative interest rates at the official level, but their central bank explained overnight that they can "certainly" lower them further to support a weakening economy. The current market speculation is that the Bank of Japan will go further into negative-rate territory when it meets next week.
China's Q3 GDP growth downshifted to +6.0%, and below the expected +6.1%, itself lower than the Q2 rate of +6.2%. In an economy the size of China's, a 0.1% miss is still a lot and takes it to a 30 year low. But interestingly, the main depressor was in their factory sector. Retail sales rose pretty much on target at +8.2% and unchanged from Q2 (and better than analysts expected). They reported higher industrial production, but lower fixed asset formation.
One sector still growing strongly is the food and beverage sector, which now accounts for NZ$1 tln in annual revenues, up impressively even if the recent food price rises are discounted.
And staying in China, a second province has decided to ban all peer-to-peer lenders, concluding that the risks to consumers are too high and the efforts to regulate them too costly.
In Hong Kong, tens of thousands of protesters flooded the streets again this weekend, this time targeting mainland Chinese-owned retail stores. There is no sign the anger is subsiding, nor the support for democratic reforms.
In the US, they have now imposed a 25% tariff on US$7.5 bln of selected EU goods after the World Trade Organisation ruled in its favour earlier this month on the issue of subsidies for Airbus. The EU says it will retaliate at the same level.
In the EU, the London Parliament debated the EU-Johnson Brexit deal and when it voted on it, it handed their prime minister yet another defeat; he hasn't won one parliamentary vote yet. He has asked the EU for an extension. Parliament may vote on related matters again this week.
In Australia, it is becoming clear that having a buy-now, pay-later account is toxic when applying for a home loan. Apparently banks there see it indicating irresponsible money management and a lack of understanding of credit obligations. Mortgage brokers are reporting credit-quality issues with potential borrowers who have this type of debt.
The UST 10yr yield has held its level of 1.75%, and is -2 bps lower that this time last week. Their 2-10 curve is positive at +17 bps. Their negative 1-5 curve is narrower for the week at just -2 bps. Their 3m-10yr curve has almost disappeared at -1 bps. The Aussie Govt 10yr is down at 1.13%, an overnight rise of +2 bps and a weekly rise of +4 bps. The China Govt 10yr is now at 3.20%, a +2 bps rise overnight and a +4 bps rise for the week. The NZ Govt 10 yr is now at 1.24%, unchanged overnight but up +6 bps for the week.
Gold is down -US$1 overnight to US$1,490/oz.
US oil prices are little-changed, now just over US$53.50/bbl. The Brent benchmark is just under US$59.50.
The Kiwi dollar is firm against the greenback today, now at 63.9 USc and the highest level in more than five weeks. On the cross rates we are still at 93.1 AUc. Against the euro we are at 57.2 euro cents. That puts the TWI-5 at just on 68.7 which is where it was at this time last week.
Bitcoin is now at US$8,070 and a fall of -5% for the week. The bitcoin rate is charted in the exchange rate set below.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».